All trade depends on natural resources –
If we’re “running out of everything,” this is an unusual way of showing it. Which brings us to two unusual men, Julian Simon and Paul Ehrlich. Half a century ago, they got into an argument. Ehrlich said the Earth’s natural resources were being exhausted. Simon said, “Like hell they are!” The argument began as a food fight. Ehrlich claimed that Earth’s limited natural resources could no longer support enough food production to sustain the Earth’s expanding population. Simon claimed that free-market price signals indicated no shortage of natural resources. Simon and Ehrlich made a wager on 10- year commodity price trends to prove who was right. Simon was. Ehrlich said Simon was right for the wrong reasons. And the argument is still going on, even though Simon died in 1998. Ehrlich and Simon were well-matched opponents: Both were born in 1932, both were raised in New Jersey, both were from Jewish families, and both were Ivy Leaguers – Simon graduated from Harvard and Ehrlich graduated from Penn. They both earned PhDs, and both were college professors. However – let us note – neither of these men was an expert on human population or demographics, nor did either have any expertise in natural resources. Simon’s BA was in experimental psychology. Ehrlich’s was in zoology. Ehrlich’s doctorate was in entomology, specializing in lepidoptera (butterflies). Simon’s doctorate
We’re running out of everything! Everybody knows that. Except everybody who looks around the world can see that it’s not true. Global population may be twice as large, but global GDP is nearly 4.3 times greater than it was in 1969. Global GDP has grown from about $18.5 trillion to about $80 trillion, according to World Bank estimates adjusted for inflation. We have double the number of people, but they’re producing quadruple the goods and services. the stuff with which goods are made and services are provided. Everybody knows the Earth has a limited amount of natural resources. And everybody knows the Earth has (or is in the process of getting) an unlimited amount of people. The world’s population was 3.64 billion people 50 years ago. Since then, it has grown to 7.28 billion. Therefore, we will soon exhaust all of the Earth’s natural resources. There won’t be enough food, water, fuel, minerals, or even standing room only.
TEAM SIMON
People are a profit center. The more we have the more we make.
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January 2019
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